The Manitowoc pilot. [volume] (Manitowoc, Wis.) 1859-1932, 1887-09-15

able series of articles III the Harpers
Monthly. The figure that corporations
cut m the business world by the magni-
tude of their operations and the stealing
that is done under the guise of corpor-
alton floating its stock fully justify the
efforts of social reformers to bring meas
ures for remedying the most glazing de-
fects of the general laws of incorporation
into public notice
Fully one-fourth of the wealth of the
country is incorporated. The most sig
nifcant fact, however, is the rapidly in
creasing proportion of the resources of
the country which belongs to corpora
tons. Such well-informed public and
business man as Abram S. Hewitt of New
York stated few years ago that fifty
years before that private corporations
did not exist but that now corporations
owned from one-third to one-half of the
capital of the civilized world. The wealth
of corporations in the United States is
increasing three or four times as rapidly
as that of private corporations. A casual
glance at Chicago paper reveals the,
fact that licenses of incorporation were
issued IN Illinois on September 9th in
volving over a million dollars of capital
stock.
The experience of this state last winter
with its swarms of mining companies
showed that the constitutional provision
against authorizing lotteries avails moth
ing while our corporation laws remain as
they are.
The history of the railroads of this
state is probably not at all exceptional
and few, if any, of them did not go into
the hands of a receiver at least once. By
several times going through process of
liquidation which too often meant little
more than bleeding of the smaller
stockholders by a ring of the larger en-
abling these latter to attain strength
sufficient to push the road through to
completion. Another typical procedure
in the incorporation of a new railroad has
the following features: A few persons
whose combined capital is not sufficient
to build five miles of railroad over flat
prairie will file with the Secretary of State
statement to the effect that it is their
purpose to build road five hundred miles
in length and they receive in return
therefor certificate of incorporation re-
cognized by the state, and which the state
has not the power to impeach except by
special act of legislation. That there can
be no profit in such a road matters not
to the members of the corporation. They
issue first mortgage bonds and furnish
profitable employment to themselves as
construction company, and when the
road is finished they sell it out to the
competing line at figure much beyond
its value or cost. The capital 'tock of
all the railroads in the country but bare
ly equals their funded debt.
The worst defect in the existing cor
poration laws lies in the facilities they
afford corporations to obtain credit be-
yond their actual resources. The step
that first recommends itself for improv-
ing corporation laws would be the enact
ment of stringent laws requiring the pub
lication by all corporations at stated in
tervals of all the facts relating to their
business together with their transactions,
resources and liabilities. A similar law
is now enforced by the general govern
ment with respect to the national banks
Until there is such publicity of all things
pertaining to all corporations there will
be no safety for capital invested or CAPT
tai seeking investment. A measure Sc
curing such publicity would induce the
laboring classes to save by Offering them
safe investments of their funds. Careful
and upright management of corporations
would be promoted by increasing the
liabilities of the directors without chang
ing those of the ordinary shareholder.
1t is probably advisable that any one in
any way concerned with the promotion
of a corporation be subject to the princi-
pie of unlimited liability for a term of
years. Instead of having a commissioner
of railroads only, it might be best to have
commissioner or department of corpor-
ations to enforce all laws pertaining to
them. Corporations are the most rigor-
GUS organs of the existing industrial Or
ganization and social reformers hope to
see such a transformation effected in them
through the agency of good laws and re-
generating powers in society that they
will revOlye into forms in which the cor
porative principle will hold sway.